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Energy expects to award LNG hub in November

The Department of Energy expects to award to the winning consortium the development of the country’s first liquefied natural gas hub by November, a top official said Wednesday.

“Hopefully, yes [in November],” Energy Secretary Alfonso Cusi said, when asked when the government planned to award the LNG hub project to the winning bidder.

Cusi said three serious proponents were eyeing the project, including state-run Philippine National Oil Co., China National Offshore Oil Corp. and Tokyo Gas together with their joint venture partners.

CNOOC teamed up with Phoenix Petroleum Philippines under joint venture company Tanglawan Philippines LNG Inc., which previously submitted a technical and financial proposal to develop the country’s first LNG hub.

Tanglawan was asked to resubmit its proposal to the DoE as they had a problem with their Securities and Exchange Commission documents.

Phoenix, a company led by businessman Dennis Uy, signed a memorandum of understanding with CNOOC Gas and Power Group Co. Ltd., a subsidiary of CNOOC, China’s largest LNG importer and terminal operator in June to study, plan and develop a LNG receiving terminal project in the Philippines.

Data from DoE showed that Tanglawan was the 18th company to apply for pre-application conference with the agency.

The other companies are Lloyds Energy, PhilLNG Lte. Ptd., BKB consortium, Cleanway Energy Development Corp.,  First Gen Corp., Tokyo Gas Corp., China National Offshore Oil Corp., Philippine National Oil Co., Vires Energy Corp and SK E&S Co. Ltd. 

Other companies were Transformation Ltd., Carmine Energy PTE Ltd., Atlantic Gulf & Pacific of Manila, Jera Co. Inc., Limay LNG Power Corp., Kepco E&C and Osaka Gas Co. Ltd.

Cusi wanted the Philippines to become an LNG hub in Southeast Asia because of its strategic location.

“Based on PDNGR [Philippine Downstream Natural Gas Rules], anyone who has the qualification can participate but there will only be one to put up the terminal. PNOC would like to become the operator. But PNOC would need a partner to do it. PNOC is looking for the partner…Once they found a partner, they will submit to the DoE their proposal. DoE will evaluate the project,” Cusi said.

Cusi said the department would have the final say on who would construct the LNG facility and PNOC, the government’s oil and gas arm, still needed to compete with the other interested parties.

“PNOC as a corporation is aspiring to operate… PNOC will compete with the others,” he said.

He said PNOC has an advantage because it has the franchise to operate the pipelines and the department “might elect” to give PNOC a stake in the LNG terminal project.

PNOC is separately undergoing the selection process for its joint venture partner. 

PNOC is presently selling its banked gas or unutilized gas from the Malampaya gas.

The DoE hopes to hold the groundbreaking ceremony of the country’s first integrated LNG facility late this year or early next year.

The government wants to put in place the LNG terminal by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility by 2024 although the Malampaya consortium said natural gas from the Malampaya field could last until 2027.

Topics: Department of Energy , liquefied natural gas , LNG hub , Philippine National Oil Co. , China National Offshore Oil Corp. , Tokyo Gas
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